A transfer for the Colombian international had already been agreed upon some weeks ago, but was held up as the clubs were negotiating possible player exchanges.
However, it has now been confirmed that a straight €35-million has been paid for the 28-year-old, who netted 32 goals for the Portuguese side last season.
"We are very pleased with the agreement, because Jackson Martinez is an extraordinary striker, able to rapidly solve any attacking play inside the box," Atletico sporting director Jose Luis Caminero said.
"Thanks to his size, he heads very well and interchangeably uses either foot to shoot. I am sure that he will greatly increase the potential of our team and will bring plenty to the group.
"We are delighted with his signing because he is a football player used to compete at a top level in Porto and has shone brightly in important competitions such as the Champions League."
Martinez will replace Mario Mandzukic, who has left for Juventus.